Research Brief: Do High School Students Know Their Parents’ Income?

Most students finish high school with low levels of financial knowledge, yet they are months away from important decisions about how to finance college. Students may not know about family finances, even though parental income is a key determinant of financial aid for college. This study measures the financial knowledge of high school students by comparing survey answers to actual measures of parental income from financial aid applications in a statewide sample. We find that students can accurately state parental income 24% of the time, within $15,000. Overreporting of parental income is much more common than underreporting. We explore potential causes and consequences of misreporting, and implications for research using self-reported income.